[Star Alliance – Press Release] US Airways and American Airlines have announced that the boards of directors of both companies have unanimously approved a merger agreement.

Operating under the American Airlines name, the combined airline will offer benefits to both airlines’ customers, communities, employees, investors, and creditors.

The combined airline will operate under the American Airlines name. Photo: Star Alliance

If the merger gains regulatory approval, US Airways will leave Star Alliance and the merged company will be a member of the oneworld alliance, of which American is a founding member. Until then, US Airways customers will continue to benefit from Star Alliance’s extensive route network.

Announcing the merger, Doug Parker, Chairman and CEO of US Airways, said, “Today marks an exciting new chapter for American Airlines and US Airways. American Airlines is one of the world’s most iconic brands. The combined airline will have the scale, breadth and capabilities to compete more effectively and profitably in the global marketplace.”

Until the merger is complete, American Airlines and US Airways will operate independently, and US remains a full member of Star Alliance. The results of regulatory review are not expected until some time in the third quarter. Star Alliance headquarters will be working with US in the interim to ensure a smooth transition for both US Airways customers and those of other Star Alliance members if the merger goes ahead as expected.

Doug Parker will serve as CEO of the merged airline and a member of the Board of Directors. Parker will assume the additional position of Chairman of the Board.

The combined airline will offer more than 6,700 daily flights to 336 destinations in 56 countries. The combined airline is expected to maintain all hubs currently served by American Airlines and US Airways. Both airlines expect that the regional carriers they own – AMR Corporation’s American Eagle and US Airways’ Piedmont and PSA – will continue to operate as distinct entities. The company will be headquartered in Dallas-Fort Worth and will maintain a significant corporate and operational presence in Phoenix.

Doug Parker said, “I am particularly pleased for the employees of both US Airways and American. This merger will create a stronger company, with the path to improved compensation and benefits and greater long-term opportunities for all our employees. We are grateful to have the support of both companies’ unions and thank them and their leaders for their hard work and vision. We look forward to a bright future for our employees and enhanced service and choice for our customers. With today’s announcement, we start becoming one team and one new airline.”

The combined airline is planning to take delivery of more than 600 new aircraft, including 517 narrowbody aircraft and 90 widebody international aircraft, most of which will be equipped with advanced in-seat inflight entertainment systems offering thousands of hours of programming, inflight Wi-Fi offering connectivity throughout the world, and “Main Cabin Extra” seating with 4-6 inches of additional legroom in the Main Cabin. The combined carrier’s fleet will also feature fully lie-flat, all-aisle access premium seating on American’s new Boeing 777-300ER aircraft and Airbus 321 Transcontinental deliveries slated for later this year. Similar to US Airways’ Airbus A330 international Envoy service, American will also retrofit existing 777-200 and 767-300 aircraft to include fully lie-flat premium seating in an effort to provide a consistent experience for customers flying on the combined carrier.

Customers can continue to book travel and track and manage flights and frequent flyer activity through AA.com or USAirways.com, and will continue to enjoy all benefits and rewards of the AAdvantage and Dividend Miles frequent flyer programmes. At this time, there are no changes to the frequent flyer programmes of either airline as a result of the merger agreement. All miles in both programmes will continue to be honoured. Upon merger approval, additional information will be provided to customers on any future programme updates, including account consolidation or benefit alignment.

Employees of the combined airline will benefit from being part of a company with a more competitive and stable financial foundation, which will create greater opportunities over the long term. Each carrier’s employees will receive reciprocal travel privileges as quickly as possible. The merger will also provide the path to improved compensation and benefits for employees.

The merger is conditioned on the approval by the U.S. Bankruptcy Court for the Southern District of New York, regulatory approvals, approval by US Airways shareholders, other customary closing conditions, and confirmation and consummation of the Plan. The combination is expected to be completed in the third quarter of 2013.